Retail sales drop by a fourth due to demonetisation
Retailers in India have seen a 50-70% drop in sales within the first 5 days as an impact of demonetisation, said RAI.
The demonetisation of Rs 500 and Rs 1,000 notes has left many in with facing a severe cash crunch and led to people lining out outside banks or ATMs for cash. The lack of liquidity for people has also impacted retail businesses. Retailers in India have seen a 50-70% drop in sales within the first 5 days as an impact of this, said Kumar Rajagopalan, MD of Retails Association of India (RAI).
Post demonetisation, it said, trade in markets across the country has reduced to 25% in comparison to normal days, traders body CAIT said.
"The commercial markets wore a gloomy and deserted look. Since demonetisation, consumer footfall is very less. Not only the retail activities but even the wholesale trade is affected severely because of very low volume of transportation of goods," CAIT said in a statement.
“Sales of essential consumable goods sold by super markets, hypermarkets and neibhorhood stores selling by acceptance of cards have had a good weekend sale. Sales of large items like electronics have dropped drastically,” said Rajagopalan.
When asked about the how long the impact of demonetisation will have on retailers business operations Rajagopalan estimates this to last for a month. “The time for the impact would depend upon the speed with which currency is made available to the citizens. We estimate that sales of retail overall may be less by about 25% for over a month's time,” he said.
He however added that this is also a loud message for all retailers across the country that demonitisation coupled with introduction of GST would eradicate non-accounted sales for retailers. Retailers of all sizes need to modernise themselves and would need to account for sales since all transactions will become traceable in the future, he said.
(With inputs from PTI)